Chan alleges Katz violated Manitoba's Municipal Council Conflict of Interest Act in December 2010 by spending taxpayer funds on a Christmas party at Hu's Asian Bistro, an Ellice Avenue restaurant the mayor owned at the time.

The case goes to court next week. If a judge decides Katz has violated provincial rules, he will lose his seat.

Smith said he and Chan contacted Winnipeg OMG, an outdoor marketing company that has a contract to supply the city with recycling boxes, in the hope of displaying Chan vs. Katz ads on two recycling boxes located on Main Street and King Street.

The marketing company's contract requires the City of Winnipeg to vet any potentially controversial ads. City officials deemed the Chan vs. Katz ad was not in "good character."

Smith decided to put the sign up on his Simcoe Street residence instead, and the two recycling boxes outside city hall currently display ads for Chan's Cathay House restaurant.

Katz's office declined to comment on Monday.

"I couldn't understand why the city would not allow us to put the sign on the trash cans, because I'm not attacking the mayor, I'm not attacking Joe Chan; I'm just informing (the public) of the trial date," Smith said Monday.

City of Winnipeg spokeswoman Tammy Melesko said in an email the city's public works department manages the Winnipeg OMG contract and determined the ad "was encouraging a public demonstration of a confrontation between two individuals."

Winnipeg OMG president Paul Sawatzky said controversial ads are rare and the city has only had to review potentially sensitive material "a couple of times" in the company's last nine years in business.

Last year, Chan filed a declaration in Court of Queen's Bench alleging Katz engaged in a conflict of interest. After making procedural errors, Chan, who has worked for Smith, withdrew his motion and had to pay $750 in court costs.

Chan's complaint was then picked up by human rights lawyer David Matas, who filed another declaration and secured the April court date.

Robert Tapper, Katz's lawyer, said his position is Chan did not follow proper court procedures and the Christmas party did not violate the conflict-of-interest act, as it was not a council or committee meeting. He also alleges Chan fabricated evidence.

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